Cattle ranchers feel pinch of credit crunch
CHICAGO (Reuters) - Tight credit and high wheat prices are preventing ranchers and farmers from placing their cattle at feedlots and from grazing them on wheat pastures, which could continue to weaken prices for the animals.
The credit crisis has made it tough for ranchers and farmers to place their "feeder" cattle at feedlots to be fattened on corn and other feed before slaughter, with deposit requirements doubling in some cases to 40 percent of the cost.
Damn, this could cause a lot of problems for people who haven't sold their calves yet. It really makes me wonder if I made the right decision to hold on to all the heifer calves. Maybe I should have sold some of them earlier. Maybe the credit crisis will straighten out and by next year the heifers will bring good money. Maybe the economy will go south so far that their will be no demand for beef and the heifers will be worthless. Damn, what a mess.
BUT, please watch out for the Dem's starting up Fannie & Freddie Mac's again. This caused the problem and starting them up will cause a problem 10 years down the road. Not everyone can afford to own a home, welfare wasn't invented to make people home owners. I would like to buy a $20 million dollar cattle ranch but 1) I don't have the money and giving me the money leaves 2) I don't have the smarts to run one. Living with one wife, two cats, a college education and a semi-bad heart does not give me the knowledge to do this. So look out for the bleeding-hearts (boy that's hard for me to write) who want to create home ownership programs again. They were/are the problem.
Oh, and NO MORE bleeding heart references please!
Moo (maybe meow)
Mike D
Milford, OH
Wondering if you would divulge what you got paid - price / lb. on your steer calves. We just sold our steers and heifers yesterday(we're from Alberta, Canada) to a buyer for a number of different feedlots(not at auction).
We got (in Canadian dollars) 97 cents / lb on 700 lb steers and 87 cents / lb on 650 lb heifers. They take off 3% for shrink. For the first time in a long time there was no sliding scale for heavier weights, although there was a slide for lower weights (I believe my husband said 3 cents on 100 lbs).
Thanks for the info if you're prepared to share it - I'm just curious as to what the U.S. market looks like - I could do some internet research but thought I'd go right to a primary producer.
Cathy
Just south of Calgary, AB
Watching the auction reports now you would be lucky to get $1.00 for the same thing right now.
Poorer people eat less beef, but at least you produce a real product that can't be outsourced to India (Argentina, maybe)
But all in all, Montana is a great place to be, whatever is happening in the rest of the world!
gp in whitehall